Consumers’ Support For Energy Bill Arrived Too Slowly, say MPs
The government must immediately explain how it will protect consumers from future price increases after it took too long for energy bill assistance to reach those who needed it the most, MPs have said.
According to the Public Accounts Committee (PAC), the government’s “lack of bandwidth” prevented all groups, including the most vulnerable, from receiving assistance at once, leaving about 1.7 million people waiting months for assistance.
The cross-party group expressed “serious concerns” about DESNZ’s (Department for Energy Security and Net Zero) “lack of urgency in addressing the energy market failures that are resulting in high energy bills for consumers.”
Support for households and businesses was projected to cost £69 billion by DESNZ in February 2023, of which £16 billion was paid between October and December 2022.
On February 27, nearly five months after consumers started receiving discounts under the primary program, approximately 900,000 households—including those in park homes and those residing on boats—became eligible for the domestic consumers’ Energy Bills Support Scheme Alternative Funding.
On the other hand, the department supported some homes and businesses that didn’t necessarily need it due to the universal nature of the largest schemes.
Two million households with conventional prepayment meters were given vouchers as part of the Energy Bills Support Scheme, but only one-fourth of those vouchers had been redeemed as of February.
The committee drew attention to “unacceptable practices” of suppliers forcing entry into the homes of vulnerable customers to install prepayment meters. Ofgem has outlawed this practice for British Gas, but it has only been suspended voluntarily with other energy providers.
When the committee heard testimony in February, it was projected that household energy costs would rise by an additional £775 from 2023 to 2024.
The PAC stated that it anticipated a status report on plans to guarantee energy affordability for the upcoming winter, including how it will address the issues for those who are most in need.
“The surge in energy prices has caused serious difficulties and hardship for households across the UK,” PAC chairwoman Meg Hillier said. Of course, it is encouraging to see the government acting quickly to put support in place for both households and businesses to maintain the lights. However, many who required assistance the most were kept in long wait times. Every day without assistance presented impossible choices for some households. To prioritize assistance for those who need it most and to provide value for money in these incredibly expensive programs, we need to see the government demonstrate a better understanding of the circumstances faced by vulnerable customers.
“We are almost halfway through the year, and we still haven’t seen any plans to guarantee affordable energy for the upcoming winter. Government must immediately demonstrate that it is clear about how to ensure sector resilience as well as how households and businesses will be protected from any future price increases.
“Today’s report fails to acknowledge the complexities of providing support to households without a direct relationship with a supplier, and it’s right we made sure there was a robust system to help protect people against fraud before rolling it out,” a DESNZ spokesperson said. With 83% of energy bill support vouchers now redeemed, we’re proud to have provided nearly £40 billion in assistance, including to residents of Northern Ireland who have been receiving help with their energy bills since November.
“Even though bills are due to fall by a few hundred pounds annually, energy prices will remain hugely inflated and continue to hit households on the lowest incomes,” said Adam Scorer, chief executive of National Energy Action. Since October 2022, the government’s response to this challenge has expanded, but many people who need assistance the most are still getting left behind. Any funds that have been committed but not yet used by the government should at the very least be reinvested. The more than 2.5 million low-income and vulnerable households no longer receiving government assistance should be helped by this. “Without more targeted support this autumn and winter, these households will be exposed to the worst of this ongoing crisis with all the dreadful consequences for health and wellbeing that we have seen day in and day out in recent times,” the president of the United States said.